The inflation hedging characteristics of US and UK investments: a multi-factor error correction approach

Historic analysis of the inflation hedging properties of stocks produced anomalous results, with equities often appearing to offer a perverse hedge against inflation. This has been attributed to the impact of real and monetary shocks to the economy, which influence both inflation and asset returns. It has been argued that real estate should provide a better hedge: however, empirical results have been mixed. This paper explores the relationship between commercial real estate returns (from both private and public markets) and economic, fiscal and monetary factors and inflation for US and UK markets. Comparative analysis of general equity and small capitalisation stock returns in both markets is carried out. Inflation is subdivided into expected and unexpected components using different estimation techniques. The analyses are undertaken using long-run error correction techniques. In the long-run, once real and monetary variables are included, asset returns are positively linked to anticipated inflation but not to inflation shocks. Adjustment processes are, however, gradual and not within period. Real estate returns, particularly direct market returns, exhibit characteristics that differ from equities.

The British Lower Palaeolithic of the early Middle Pleistocene

The archaeology of Britain during the early Middle Pleistocene (MIS 19–12) is represented by a number of key sites across eastern and southern England. These sites include Pakefield, Happisburgh 1, High Lodge, Warren Hill, Waverley Wood, Boxgrove, Kent's Cavern, and Westbury-sub-Mendip, alongside a ‘background scatter’ lithic record associated with the principal river systems (Bytham, pre-diversion Thames, and Solent) and raised beaches (Westbourne–Arundel). Hominin behaviour can be characterised in terms of: preferences for temperate or cool temperate climates and open/woodland mosaic habitats (indicated by mammalian fauna, mollusca, insects, and sediments); a biface-dominated material culture characterised by technological diversity, although with accompanying evidence for distinctive core and flake (Pakefield) and flake tool (High Lodge) assemblages; probable direct hunting-based subsistence strategies (with a focus upon large mammal fauna); and generally locally-focused spatial and landscape behaviours (principally indicated by raw material sources data), although with some evidence of dynamic, mobile and structured technological systems. The British data continues to support a ‘modified short chronology’ to the north of the Alps and the Pyrenees, with highly sporadic evidence for a hominin presence prior to 500–600 ka, although the ages of key assemblages are subject to ongoing debates regarding the chronology of the Bytham river terraces and the early Middle Pleistocene glaciations of East Anglia.